RUSH: We’ve got news of Trump’s tax plan coming up and Drive-By Media reaction to it. You know, a lot of conservatives in the commentariat who have uttered words of contempt for Trump are now praising him with his tax plan. Well, yeah, you shall hear shortly coming up. We also have many in the Drive-By Media, such as David “Rodham” Gergen, the dean of conventional wisdom, thinking that Trump’s tax plan is very Reaganesque.
But the point is when somebody like David “Rodham” Gergen says it’s Reaganesque, that’s not complimentary to the left. There’s no complimentary association possible with Reagan, when you’re talking about taxes. They despise Reagan on taxes. His tax cuts created the deficits and the national debt that still strangle us to this day, is what they believe.
RUSH: Now, back to the phones. This is Taylor, northeast Maryland. Great to have you. I’m glad you waited, and welcome to the program. Hi.
CALLER: Hey, Rush, it’s a great honor.
RUSH: Thank you, sir.
CALLER: So a quick question in regards to Trump’s tax plan. Up to this point Trump has been my guy through and through. However, when he released his tax plan, I feel in this country there’s a huge lack of motivation or just call it laziness to be successful, and by his giving a zero percent tax rate to those who make, you know, $25,000 for single or $50,000 for a married couple, how is that going to motivate people to get out there and do better for themselves?
RUSH: Well, I had same thought yesterday. I didn’t voice it in the same words that you have here, but a zero tax rate, to me, is self-defeating. I think what a zero percent tax rate is, sad to say, is pandering. What is happening with tax policy, it seems no matter who comes up with a tax plan, no matter who talks about it, it seems that there are some requirements that you must say, and one of the things you must say is you’re gonna soak the rich. No matter who you are, Republican, Democrat, Martian, you have to let people know the rich are not gonna get away in your plan. As though they ever do.
The next thing you have to do is to acknowledge that there are some really, really decent, hardworking, wonderful Americans getting shafted every day, and they’re gonna be rewarded by not having to pay anything. Well, the fact is that already happens. I forget the precise stat, but I believe that it’s close to 50% of Americans, I don’t know if it is 50% of working or just 50% of the whole population, don’t pay any income tax. Now, they pay payroll tax, Social Security and all that, but no income tax. And I have always believed that there ought to be some skin in the game, for whatever reason. In your case, to inspire work and achievement to escape various income levels.
Trump’s got some advantages in his tax plan, no question his rates, 10, 20, 30, 40, whatever, I mean, 30 being the top, that’s quite motivating to go ahead and go out there and earn dollars. If you get to keep 70 cents of every dollar you earn, as opposed to now in many states, you get to keep 49 or 45 cents of what you earn, the rest of it goes to various state and federal agencies and taxing authorities and so forth.
RUSH: Let’s go to audio sound bites here. We have a montage of the media commentariat comparing Trump’s tax plan to Ronaldus Magnus. Now, I don’t want to say anything, folks, but we did that here on this program yesterday in great detail. Yesterday when Trump’s tax plan came out, people were savaging Trump’s tax plan because it went overboard, they said, in taxing the rich.
I went back and got some Reagan comments from 1985 after his first wave of tax cuts where he mentioned a number of wealthy corporations in America that weren’t paying anything, and that just wasn’t right. The whole idea, by the way, that the rich got away with paying nothing during Reagan and his tax cuts? That’s one of the many lies that’s being told in the history revisionism of the Reagan tax cuts. The rich are paying a bigger share of the tax burden than they ever have, and it all started with the Reagan tax cuts.
Now, you might say, “Well, then why aren’t they mad?” The reason they aren’t mad is that they’re keeping more of what they earn at the same time. See, that’s the beauty of this. By lowering the rates… When Reagan took office, the top marginal rate was 70%. Now, very few people paid 70%. Only the idiots. It was the highest bracket, and it took awhile to get there, but there were plenty of options to shelter your income rather than pay that.
But that money, when you sheltered it, went somewhere besides you, and it did not all go to economic growth or in areas that would contribute to economic growth. Reagan reduced, in eight years, the top rate 70% to 28%. The amount of revenue to the Treasury doubled. So the rich began paying even more in taxes, but only because they were sheltering less. When you get to keep 82Â¢ of every $1 that you earn, you’ll report dollars left and right. You won’t worry about trying to shelter some of it or hide it with deductions.
You’ll happily take the simple route, report the income, take the tax. The way it works is the low rate creates economic growth, which creates jobs, which creates more taxpayers, which spreads the taxation burden across more people. It all works. It works every time it’s tried. But Obama doesn’t believe in it. He’s done his best to wipe it out like every Democrat has, and they get caught up in the fairness of rate percentage rather than revenue generated.
Obama can look at the capital gains rate at 15% and think the people paying it are uber-rich and it just is not fair, even though the rate is creating revenue flowing to Washington like nobody ever predicted before. But that doesn’t matter to Obama. What matters to him is that 15% just isn’t high enough. “It’s not fair. It needs to go up to 30%,” and the minute that starts happening then people stop reporting capital gains. And the amount of revenue going to Washington plummets. Well, it may not plummet, but it shrinks.
So there’s no mystery to this. The rich pay a higher share, and they end up keeping more of what they earn. Now, people may say, “That’s not possible.” It’s totally is possible. The math is what it is. Look at it this way. Use even numbers. You earn $10,000 a year. And there are five tax brackets, and the highest tax bracket is 80%. In other words, you would pay 80Â¢ cents of every $1 you earned. But to avoid that, you can invest over here in this charity or that charity or some kind of newfangled deduction that’s in the tax code so that your income never got to the level requiring you to pay 80%.
And you’ve structured your life around tax deductions to avoid that 80%, the 70% below it, the 60% below it. You want to pay as little as you can. You certainly aren’t gonna be an idiot and pay 80% of your taxes in income. It used to be 90% in this country. When JFK was president, 90% was the top marginal bracket. And that’s when JFK embarked on Reaganesque tax cuts, by the way. Or somebody comes to you and says, “You know what? We’re gonna lower your tax rate. There’s just gonna be one that will affect you, and it’s 25%.”
“Wait, you telling me that I’m only gonna pay $2,500 on this $10,000 I’ve earned?”
“That’s exactly right.”
The guy’s gonna say, “I’ll do that every day of the year.”
“Now, you’re gonna lose your deductions. There’s a tradeoff for this.”
“That’s fine with me. It’s less work for my accountant. It’s less mess for me. It’s less chance of an audit. It’s straight cross the board.”
That’s what happened. So more people started reporting income and it was taxed. Tax revenue went up. They were paying a smaller rate; they kept more. The rich were paying a larger share of the tax burden in actual dollars, and now the percentages have caught up, too. It worked! It worked so well, the left had to immediately begin to make up things and lie about it, call it trickle-down, say it doesn’t work. So here comes Trump with his tax plan yesterday, and here is a commentariat media montage.
DAVID ASMAN: Ronald Reagan, when he left office he brought the top rate down to 28%. Donald Trump, 25%. Just about the same.
NEIL CAVUTO: Donald Trump’s ambitious tax package that many call “Reagan big.”
FRED BARNES: Supply-side economics worked so famously in the 1980s and ’90s with the Reagan tax cuts. There’s a very good reason to try it again.
STUART VARNEY: Just like Reagan.
ERIN BURNETT: …equating it to Reagan.
JEFFREY LORD: This is certainly Reaganesque.
STEVE DOOCY: Rush Limbaugh said yesterday on his air, the Trump plan is similar to Reagan’s 1980s tax proposals.
RUSH: This is precisely correct. This is exactly right. And later on on Fox, this is America’s Newsroom, Bill Hemmer this morning talking with Neil Cavuto about Trump’s tax plan…
HEMMER: Rush Limbaugh was on that last point if you’re not paying taxes, what’s the incentive to work harder and make more money?
CAVUTO: He raises a point here, ’cause we’ve got such big entitlement issues and other spending issues that we all have a seat at this table. We all pay for a seat at this table, various rates. To establish: When you went through those four rates that one of them is 0%, sends a signal now that we’re gonna put the burden on half the taxpayers of this country to carry the whole load, and that’s a problem.
RUSH: So that was… I forgot to set it up properly but that was a discussion of the 0% rate that is in Trump’s plan. Folks, I think that’s in there… This the first sign of the presence of consultants in the Trump campaign to me, because this is structured in such a way as to approach taxation the way we always have. We simply can’t get out of this box. It’s got two ingredients: “The middle class is forever savaged, put upon, taken for granted, never respected. You pay nothing. We love you! We are your champions. And the rich over here? They’re getting away scot-free. We’re gonna soak ’em!” Those two elements seem to be present in almost any tax play, other than the FairTax and so on. But I’m talking about whenever there’s a tax reform plan, those two things are required politically, at least in Consultancy 101.
RUSH: We continue here with media reaction and commentariat reaction to the Trump tax plan. This next sound bite, Bill Kristol, David “Rodham” Gergen on — let’s see, this is I guess on Erin Burnett’s show on CNN, Erin Burnett OutFront. Just listen to this, maybe offer some characterizations to follow, but Erin Burnett says, “Bill Kristol, you have been very, very critical of Donald Trump. You had a Twitter war with Donald Trump. But you are a conservative. This is a plan that some conservatives would love. Cut taxes, growth will improve.”
KRISTOL: It’s a pretty standard Republican type tax plan. It’s smart of Donald Trump. Donald Trump, I have my issues with him and I don’t think he should be president; he is a smart politician. As soon as he gets through the standard Republican talking point about lower tax rates, more revenues, what does he say? We’re gonna bring jobs back from overseas, we’re gonna compete better with overseas, this is gonna make American great again. He goes back to his core message, which is a very effective message, which is an American nationalist message.
RUSH: An American nationalist message. Nationalism, these guys don’t like nationalism, do they? Nationalism’s kind of beneath us in this era of global everything, right? I mean, I may be misunderstanding this, but nativism, nationalism, so quaint now, we’re all citizens of a much, much larger collective here. I mean, nationalism, it’s like pandering to the bitter clingers. I don’t know if Kristol means it that way or not. And I don’t know, if you listen to Kristol, they’re calling Trump a — what did he call him, a smart politician? This may be the first guy that ever called Trump a politician, much less a smart one. “He goes through the standard Republican talking points, lower tax rates, more revenues, and then we’re gonna jobs back from overseas, gonna compete better overseas, make America great again, back to his core message, very effective message, which is American nationalism.” Maybe he likes it.
Could this be a turning point for some of these people that have been anti-Trump? Could this Trump tax plan turn some of these people into maybe, not Trump supporters, but maybe watered down and dilute some of their opposition to him? I guess it could. Stranger things have happened. But the Trump tax plan is Reaganesque in many, many aspects. Now, here is David “Rodham” Gergen on the same show. After Kristol finished Erin Burnett then said, “David, you worked with Ronald Reagan.” That’s no biggie. He worked with everybody. I think David Gergen worked with Lincoln. Anyway, “David, you work with Ronald Reagan. Is this like Reagan’s tax plan?”
GERGEN: I think you do need to give credit to Trump for one thing. We’ve been pushing him. Where’s the substance? Where are your plans? He’s finally come forward with a plan. Give him credit for that. It’s also true that I think it has a populist element. Thirty-one million households, according to the plan, would no longer pay taxes. That’s obviously attractive.
RUSH: I’m sorry. I’m not know as the Rain Man here, but I don’t know what the number is, but I did look this up during the break. It’s 46 point something percent of people are not paying income tax already. We already have effectively a zero percent tax rate. And then you throw in the — well, we don’t have a zero rate. We just have such things as earned income tax credit and other vehicles, if you will. I mean, people end up paying no tax. Maybe a zero percent rate is new. I’m never gonna have one so I haven’t really paid a lot of attention to it. (laughing) Would I want a zero percent tax rate? Yeah, in my dreams, just for a year or two. Yeah. I’d be set.
My point is, 31 million Americans would no longer pay taxes. That’s obviously attractive. Is it? I don’t know. I’ve got a problem with this. And again, it’s rooted in populism, in a sense. We’ve already got too many convoluted structures here that prevent people, disincentivize people from expanding their income, because if they earn too much they will no longer qualify for whatever welfare benefit they’re on. That’s not good. I don’t know. Snerdley just said that if he were running, he would immediately come out with one statement on his tax plan, and his statement would be that the rich are gonna pay 50%, and he would dare the Democrats to oppose him.
He thinks it would shut the Democrats up, 50% of all taxes, the rich are gonna pay ’em. What would your definition of rich be, by the way? (interruption) Okay, so your definition of rich is a half million or above. That group of people would pay at least 50% of all taxes, and you think that would shut the Democrats up, they can’t possibly oppose that. Well, they sure as hell can. They can oppose anything they want. They can say 55. They can say 60. They could come up with lies and say it’s a trick, that you don’t mean it, that it you’ve struck a deal with the rich to get them to go along with it but at the end of the day they’re not gonna be paying that. (interruption) How would low-information voters feel? They probably would love it, and that’s why I hate it.
This whole business of taxes, what’s missing in all of this explanation of taxes, including in my opinion although it’s not totally missing when you talk about FairTax or flat tax, is an explanation of how the whole thing works. Let me put this in a nutshell, because I don’t want to divert myself from moving on here. I’m not comfortable with the same language about taxes that I hear out of Democrats that contains two requirements. It seems like anybody running for office or who is already in office and is trying to change the tax code, there are two things. Whatever else your plan is going to be, there are two requirements. You must say the rich are gonna take it in the shorts. And you must say it as though you’re happy about it and you can’t wait to soak ’em. And I wouldn’t go anywhere near that.
The second thing you have to do is make a beeline for the low-information crowd and tell them that a bunch of them and others aren’t gonna pay anything and that your tax plan is rooted in fairness, and then you lose me. And if I were coming up, if I were running for office and was gonna introduce a tax plan, it wouldn’t contain either of those two things, meaning my pitch would not. Nobody’s gonna be the enemy, in other words, in my tax plan. The rich are not the enemy and the people not paying anything are not the enemy. The government is the enemy, in my tax plan. I’m sick and tired of all tax plans being oriented about how much government needs, with the sudden reality that government can never do with less. It’s always us that are forced or asked to do with less. The government never is.
Well, that’s gonna change in my tax plan. I’m gonna have a budget. The government’s gonna get X-amount of money. It’s gonna come from various sources, tax revenue’s gonna be part of it. The American people are through funding this behemoth that is out of control and $20 trillion in debt. The American people are not responsible for it beyond the fact they’ve elected the reprobates that have done it.
The rich are not to blame for the national debt. The people not paying taxes are not to blame for the national debt or the deficit or any of these other problems resulting from it. And the usual enemies in the tax code would not be mine. The American people are not gonna be an enemy. The rich are not gonna be an enemy. The poor aren’t gonna be an enemy, maybe no enemies, but the government is gonna called to account in my tax plan. And that’s why I don’t like all this. No matter who presents a tax plan, it’s got the required enemies and the required victims. And it just seems like pandering to me.
But again, I must stress, I’m not in politics, I’m not a professional, I’m not a consultant. I’ve never had to get votes for anybody or anything. So I may be all wet. I mean know what I’m talking about. It may not be practical at all. They’re the ones that have the polling data, the research that tell us what people want to hear. They do the focus groups and all that. So I could be all wet. I have to add that caveat. I’m just sick and tired, every tax policy or every tax plan we come up with it seems like the enemy are the people that pay them. And that just offends the hell out of me.
The people working and earning a living in this country are not the enemy. And I’m tired of pitting groups of Americans against each other, particularly when it comes to money and finances, ’cause that leads to this mess we’re in because it ends up with everybody being told to hate or envy anybody that has more than they do. Then you add to it the reason they’ve got more than you do is ’cause they’re luckier than you or they’ve stolen from you or they have cheated from you or whatever else Democrats say. Never does anybody have any more money than you because they’re more creative or they’ve worked harder, or maybe they’re Kennedys and they inherited it. It’s always ill-gotten when we talk about it, and it doesn’t do our culture any good to breed this envy and resentment for achievement. It just doesn’t. We need to be rewarding it, promoting it. People that achieve great things need some attaboys. They don’t need to become suspects.
Back to the audio sound bites. David “Rodham” Gergen. Back to Bill Kristol and still on Erin Burnett OutFront. This is Kristol after what you heard David Gergen just say.
KRISTOL: The general view has been — and I’ve had it to some degree — that he’s this kind of phenomenon. He’s got people are interested in him, but obviously he’s gonna fade, and I still think he will fade eventually. But, you know, he is learning on the stump and in the interviews. He’s obviously watches himself and he talks about himself a lot, but I think he’s a shrewd guy, and he also probably modifies some. I wish — and the other candidates will strike — they should be learning a little bit from watching Trump. And I like Rubio a lot, but I’m a little worried that the other… And I prefer some of the other candidates to Trump.
KRISTOL: I’m a little worried; they don’t seem to be learning as quickly from this campaign as Trump is.
RUSH: Oh, really now? Now, that’s fascinating. Did you hear that, Mr. Snerdley? Did you hear Kristol worry the other candidates are not learning quickly enough from Trump? If I may be so bold again… This is one of my fervent hopes, by the way, and I kept this to myself. I didn’t divulge this because I did not want this to end up in the public domain and have it… It’s like not announcing the marketing plan, just executing it.
You know, I got all these people accusing me of being a Trump supporter when I wasn’t. What I was was not a Trump hater. So they’re assuming I’m a Trump supporter. “How can you do this, Rush? He’s not a conservative! I don’t understand.” I held my cards close to my vest, and I eventually said, “My dream here is that people learn you can combat political correctness and thrive, that you can be real and thrive, that you can criticize Democrats and thrive. You don’t have to be afraid!
“You can tell the truth about all these issues that are doing great damage to the country and not just survive; you can thrive.” And I was hoping that a lot of people would emulate Trump in this regard. But there is… There are many, but there’s one reason why some of them didn’t. This one’s easy to explain, but it’s tough because I gotta mention names. I don’t like mentioning names here. Let’s say that you are candidate Marco Christie. You are Marco Fiorina Christie, and you are seeking the presidency, and over here is Trump, and he’s just lapping the field, and what’s he doing?
He’s calling illegal immigrants murderers, rapists, purse snatchers, muggers, whatever else. He’s out there challenging McCain, doing all this unconventional, politically incorrect stuff. And you look at it if you are Marco Fiorina Christie, and say, “Man, man, maybe there’s a new way I could do this!” And you turn on the TV, and you hear the inside-the-Beltway commentariat just rip Trump to shreds for what he’s doing, and you say to yourself, if you are Marco Christie Fiorina, you don’t want to get ripped that way. So you don’t do what Trump does.
You don’t want turn on Fox or CNN or anywhere else and be talked about the way they’re talking about Trump, and the best way to avoid that is don’t do what Trump’s doing. Therefore, Trump isn’t copied or emulated. Therefore, the lessons aren’t learned. It’s been kind of frustrating as I’ve sat here holding my cards to the vest on this. But Kristol has let it out of the bag here. He says he’s a little worried the other candidates don’t seem to be learning as quickly. Bill, it’s not that they’re not learning.
It’s that they just don’t want to be commented on the way Trump has been. For crying out loud, that explains Boehner and McConnell right off the bat. Probably, in fact, a whole lot of other people. “I don’t want to get the incoming Trump’s getting! I don’t want people talking about me the way they’re talking about him. Oh, my God! I don’t want Krauthammer saying those things about me, or George Will! I don’t want that!” So they don’t go anywhere where Trump’s going. It’s not a casting of blame. It’s just an assessment of the circumstances as they exist at the moment.
RUSH: Here’s Marianne in Nashville, Georgia. Hey, Marianne. It’s great to have you on the show. Hi.
CALLER: Hey, hey, Rush. You are the top of the top for a good reason, and it is a thrill to talk to you.
RUSH: Well, thank you very much. I sincerely appreciate that.
CALLER: I’ve been with you since the beginning. My father and I had many good talks while he was alive, and many of them revolved around your show content over the years.
RUSH: Well, thank you very much.
CALLER: Well, I wanted to say that I am very disappointed at the continued social engineering that seems to be part of Trump’s tax plan in that he is going to leave untouched the home mortgage interest deduction and not subject that to any sliding scale, nor comparable giving. So my way of thinking as a taxpayer is when someone takes a deduction and those dollars are therefore exempt, it means that somebody else has to make up the difference if we have bills to be paid in the country.
CALLER: And so when someone contributes to the Ohio Quilt Museum or the Clinton Foundation — or any of the Buffett children’s billion-dollar foundation funded by Warren’s charitable giving — and therefore deduct dollars from his tax liability, I don’t like it. At all. And Trump leaves in place all of that.
RUSH: Well, you mention some fascinating things, and you started by talking about the… I forget the term you used. I call it “social architecture.” The tax code’s always been used for that. The tax code has always been used to construct a society or culture that the tax writers want. At which time it has also been used as a means of furthering certain kinds of economic activity. Now, a home mortgage interest deduction goes way back.
I’m not sure of the actual data of implementation, but it goes back to the fifties housing boom following World War II. It was part of the furtherance of the American dream, which was hope ownership, owning a home. But the truth is that the real estate lobbies had succeeded in getting to the Ways and Means Committee members of the time. And it was a way of pushing home sales. And things like this are in the tax code. There are more of them than anybody knows.
CALLER: Way more. And that is one of the disappointments that I see that is going to continue in the Trump plan. I was hoping —
RUSH: Well, they’re very tough. See, that’s why the FairTax and flat tax eliminate them, but the tradeoff is a 15% max rate or maybe 20%.
CALLER: And what would be wrong with that?
RUSH: Well, I’m in favor of either one for the most part, but real life political consequences of eliminating the home mortgage deduction… This actually might be a time to consider doing it.
CALLER: Well, Rush, when you have something like, you know, so many different charities that have sprung up —
RUSH: Well, now, hang on. That’s the next thing I was gonna get into, but I’ve got just a few seconds left. So if you can hang on out there, Marianne, we’ll get into the charitable aspect of this. Because both of those are social engineering, and at one point there were good reasons for them. So just hang on here.
RUSH: We’re back here with Marianne in Nashville, Tennessee. Marianne, I need to double check this, but my memory is that it wasn’t until the 1950s that people needed mortgages to buy a house anyway, in a mass sense. That’s when the prices began to get to the point where you needed a 30-year loan to be able to buy a house. Now, because of time constraints let me move to the charity side here. I understand what you’re saying about charity and your point about everybody that gets a tax deduction, that money has to be made up by somebody else. True. But I’ll tell you this, too.
One of the first things that Obama wanted to do with changes in the tax code was eliminate all charitable deductions, and his reason was — well, he didn’t give the real reason. I knew what the real reason was. He wanted to either lower or eliminate the deduction. And that would eliminate a lot of charitable giving, which is fine with Obama. He wants the government to move in and replace all of the individual charitable donations that are taking place. It wouldn’t eliminate all, but it would eliminate a lot of charitable giving, and that was fine with Obama because he would love for the government to be even more involved in helping people who don’t have the ability to help themselves, or who can’t stay in business without people donating to them. He would love creating that increased dependency.
So I was opposed to Obama’s move to eliminate the charitable deduction because I thought it had an ill intent about it. He didn’t say any of this but I knew that’s what it was. His reasoning, I forget what it was, but it was bogus. It was a hidden maneuver on his part to have all these charities replaced with federal support.
CALLER: Well, unless we’re going to be federally subsidizing quilt museums and symphonies and the many, many, many — we have a proliferation of both charities or nonprofits. I guess there maybe should be a distinction —
RUSH: Now, the nonprofit, now you’re getting a little closer to home with me on the nonprofits.
CALLER: Of which there are gazillions.
RUSH: Oh, there are gazillions and gazillions of them out there.
CALLER: And foundations whose work we really — I don’t know what the Clinton Foundation is doing in these many far-flung places of the world, and I don’t know, you know, how exactly it’s operating, and I don’t know that in Third World nations it’s very easy to track where the money is going.
RUSH: They’re not doing anything but going over to each of these countries and throwing a party once a year to celebrate all the good vibes and good intentions —
RUSH: — that they’ve got.
CALLER: And they get to deduct the money, and I object.
RUSH: Well, look, I totally understand your reasoning on both of these. I was gonna say about the mortgage interest deduction, given the state of the economy and given the fact that Millennials seem to be big on sharing rather than owning. You know, all these Millennials are out there talking about, “It’s not cool to own a car. I’ll just Uber everywhere and I’ll buy a Segway and I’ll be really cool or maybe like they do in Europe and I’ll drive my bicycle everywhere.” But they don’t want to own cars and they don’t want to own houses.
And for those of you that don’t like the home mortgage deduction, well, keep in mind why we have it. You may not like hearing why we have it. We have it not because back in the day some brilliant person figured out that it would be a great economic tool. We have the home mortgage deduction because some people successfully lobbied Congress to make it cheaper to buy houses. Now, who’s interested in that? Well, maybe your good old real estate markets. People that sell real estate would love for it to be as cheap as it can be. So if government’s gonna subsidize the purchase they’re all for it.
The home mortgage deduction was to subsidize the sale of homes. (interruption) Well, is that one of the reasons we have such a big middle class, the home mortgage deduction? (interruption) Well, that’s a chicken-or-egg question. You’re saying the fact that we have so many people owning homes is equal to having a great middle class? My point is this whole thing was not structured out of altruism. The home mortgage deduction was not created — it’s like anything else in politics. It was meant to benefit the people who are in business to sell houses and build them. It’s the result of lobbying. But it is very popular.
It’s just like, one of the things in Reagan’s tax plan in 1986 was the limitation of the credit card interest deduction. Do you remember this? That caused an excrement storm over this country like nothing I have ever seen. I started this program in 1988. Credit card interest, it was phased out. And about the time this program was starting was when people were beginning to lose that deduction. It was chump change. They were so ticked off, people called here left and right to complain about it. And the reason is because they went out, they spent money. This is classic. They were spending more money to be able to deduct a small portion of it on their taxes, thinking that they were getting a deal.
Yeah, Snerdley wants ’em to bring it back, the credit card interest deduction. It’s gone now, but it was a big deal, and we’re talking about a hundred dollars or $200 a year, and people were fit to be tied over this for the longest time. And I sat here, I tried to give ’em the facts of life. I said, “Do you realize how much money you want to spend, how much money you will be out of pocket in order to get that chump change?”
“I don’t care. I want it. I’ve built my life around having it. It’s a fact of life in how I use my credit cards, and they’ve taken it away.” Okay, okay, I get it. And the same thing would happen if they take the home mortgage deduction away. There would be riots. I mean, you talk about pitchforks and the barbarians at the gate? Yeah, no question about that.